Riverview Rubber Estates, Berhad (820-V)
33A Jalan Tun Sambanthan 30000 Ipoh
Perak Darul Ridzuan
Malaysia
70
Annual Report 2008
RIVERVIEW
RUBBER ESTATES, BERHAD
(820-V)
Incorporated in Malaysia
2008 AnnuAl RepoRt
70
thAnnuAl GeneRAl MeetinG
R iveRview R ubbeR e states , b eRhad
Company No. 820-v — Incorporated In Malaysia
page
2 - 3 Corporate Information
4 Notice Of Annual General Meeting
5 Statement Accompanying Notice Of Annual General Meeting 6 Plantation Statistics
7 Financial Calendar 8 Financial Performance 9 Financial Highlights 10 - 11 Analysis Of Shareholdings 12 - 14 Profile Of Directors
15 - 17 Chairman’s Statement
18 - 22 Corporate Governance Statement 23 - 25 Audit Committee Report
26 - 27 Statement On Internal Control
28 Statement Of Directors’ Responsibility In Relation To The Financial Statements
29 - 32 Corporate Social Responsibility 33 Properties Of The Company 35 - 89 Financial Statements
Form Of Proxy
Contents
BOARD OF DIReCTORS Juliana Manohari Devadason Non-Independent Non-Executive Director Chairman
Adrian Tsen Keng Yam Executive Director
Lim Hu Fang Independent Non-Executive Director
Stephen William Huntsman Non-Independent Non-Executive Director Jeraman @ Jayaraman a/l Narainan Independent Non-Executive Director Roslan bin Hamir Independent Non-Executive Director
AuDIT COMMITTee Lim Hu Fang Chairman
Jeraman @ Jayaraman a/l Narainan Stephen William Huntsman
Roslan bin Hamir
ReMuNeRATION AND Lim Hu Fang Chairman
NOMINATION Jeraman @ Jayaraman a/l Narainan COMMITTee Roslan bin Hamir
SeCReTARy Adrian Tsen Keng Yam
ReGISTeReD OFFICe 33A Jalan Tun Sambanthan 30000 Ipoh
Perak Darul Ridzuan Malaysia
Tel: 05-255 9015 Fax: 05-255 9016
PRINCIPAl PlACe OF Riverview Estate BuSINeSS 31800 Tanjung Tualang
Perak Darul Ridzuan Malaysia
Tel: 05-360 9201 Fax: 05-360 8426
C orporate I nformatIon
ReGISTRAR Business Process Outsourcing Sdn Bhd 33A Jalan Tun Sambanthan
30000 Ipoh
Perak Darul Ridzuan Malaysia
Tel: 05-255 9015 Fax: 05-255 9016
AuDITORS Ernst & Young
PRINCIPAl BANkeRS HSBC Bank Malaysia Berhad AmBank (M) Berhad
UBS AG
CIMB Bank Berhad
Standard Chartered Bank Malaysia Berhad HSBC Bank Plc
Malayan Banking Berhad
SOlICITORS Maxwell Kenion Cowdy & Jones
STOCk exCHANGe The Main Board
lISTING Bursa Malaysia Securities Berhad Stock Code: 2542
Stock Name: RVIEW
Corporation information (Continued)
n otICe o f a nnual G eneral m eetInG
Notice is Hereby GiveN that the Seventieth Annual General Meeting of the Company will be held at 33A Jalan Tun Sambanthan, 30000 Ipoh, Perak Darul Ridzuan, Malaysia, on Friday, 19 June 2009 at 11.00 a.m. for the following purposes:-
AGeNDA
1. To receive and adopt the audited financial statements for the financial year ended 31 December 2008 and the Directors’ and Auditors’ reports thereon.
Resolution 1
2. To approve the payment of directors fees of RM50,000 each for the financial year ending 31 December 2009.
Resolution 2
3. To re-elect Roslan bin Hamir who retires as Director of the Company in accordance with Article 88 of the Company’s Articles of Association.
Resolution 3
4. To re-elect Stephen William Huntsman who retires as Director of the Company in accordance with Article 96 of the Company’s Articles of Association.
Resolution 4
5. To re-appoint Messrs Ernst & Young as the auditors and to authorise the Directors to fix their remuneration.
Resolution 5
6. To transact any other business appropriate to an Annual General Meeting.
By Order of the Board
AdriAN tseN KeNG yAm Secretary
Ipoh
20 May 2008
The Seventieth Annual General Meeting (“AGM”) will be held at 33A Jalan Tun Sambanthan, 30000 Ipoh, Perak Darul Ridzuan, Malaysia on 19 June 2009 at 11.00 a.m. The Directors standing for re-election at the AGM are as follows:
i. Roslan bin Hamir
(Pursuant to Article 88 of the Company’s Articles of Association)
ii. Stephen William Huntsman
(Pursuant to Section 96 of the Company’s Articles of Association)
The profile of the above Directors are set out on pages 12 to 14 of the Annual Report. The Directors’
shareholdings in the Company are set out on pages 10 and 38 of the Annual Report.
The details of attendance of Directors at Board Meetings held during the Directors’ tenure in office for the financial year ended 31 December 2008 are set out in the Corporate Governance Statement on page 19 of the Annual Report.
During the financial year under review there are no material contracts involving Directors and major shareholders.
S tatement a CCompanyInG n otICe o f a nnual G eneral m eetInG
(pursuant to paragraph 8.28 (2) of the Listing requirements
of Bursa maLaysia seCurities Berhad)
2008 2007 2006 2005 2004 OIl PAlM
Average area in production (hectares) 1,759 1,759 1,664 1,599 1,494
Crop (tonnes FFB) 44,976 39,589 43,651 38,379 39,452
Yield per hectare (tonnes FFB) 25.56 22.5 26.2 24.0 26.4
Average price realized (RM per tonne FFB)
585.50 528.84 302.81 288 328
Profit per mature hectare (RM) 10,599 8,327 3,812 3,750 5,627
AReA STATeMeNT as at 31 December
Oil palm – mature 1,759 1,759 1,664 1,598 1,492
– immature – – 95 157 261
Total planted hectarage 1,759 1,759 1,759 1,759 1,754
Buildings, sites, gardens, etc 27 27 27 18 18
Ravines and swamps 7 7 7 19 24
Total area (hectares) 1,793 1,793 1,793 1,796 1,796
p lantatIon S tatIStICS
FINANCIAl yeAR eND 31 December 2008
ANNOuNCeMeNT OF QuARTeRly ReSulTS
First Quarter 25 April 2008
Second Quarter 28 July 2008
Third Quarter 29 October 2008
Fourth Quarter 27 February 2009
PuBlISHeD ANNuAl RePORT
Despatch Date 26 May 2009
GeNeRAl MeeTING
Seventieth Annual General Meeting 19 June 2009
DIvIDeND
1st Interim & 1st Special Declaration date – 9 May 2008 Entitlement date – 13 June 2008 Payment date – 18 July 2008 2nd Interim & 2nd Special Declaration date – 31 October 2008
Entitlement date – 5 December 2008 Payment date – 16 January 2009
f InanCIal C alendar
f InanCIal p erformanCe
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2008 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000
Revenue 7,904 7,468 6,833 4,128 26,333
Operating profit 6,303 5,428 5,081 1,832 18,644
Profit before tax 7,027 6,455 4,389 (526) 17,345
Taxation (1,565) (1,579) (1,210) (966) (5,320)
Profit attributable to shareholders
5,462 4,876 3,179 (1,491) 12,026
Earnings per share (sen)
8.42 7.52 4.90 (2.30) 18.54
Dividend per share (sen)
– 5.92 – 8.88 14.80
Net tangible assets per share (RM)
2.45 2.46 2.51 2.44 2.44
f InanCIal H IGHlIGHtS
ReveNue (RM ‘000)
5,000
0 10,000 15,000 20,000
2004 2005 2006 2007 2008
30,000 25,000
SHAReHOlDeRS’ FuND (RM ‘000)
0 40,000 80,000 120,000 160,000
2004 2005 2006 2007 2008
TOTAl ASSeTS (RM ‘000)
0 30,000 60,000 90,000 120,000 150,000 180,000
2004 2005 2006 2007 2008
PROFIT BeFORe TAx (RM ‘000)
0 5,000 10,000 15,000 20,000
2004 2005 2006 2007 2008
Authorised Share Capital : RM100,000,000 Issued and Fully Paid : RM64,850,448
Class of Shares : Ordinary Shares of RM1.00 each Voting Rights : One vote per RM1.00 share DISTRIBuTION OF SHAReHOlDINGS as at 8 May 2009
No. of Holders Holdings Total Holdings %
25 less than 100 1,173 *
662 101 - 1,000 572,489 0.88
1,943 1,001 - 10,000 8,258,688 12.73
403 10,001 - 100,000 9,416,498 14.52
25 100,001 - 1,249,008 ** 5,741,508 8.85
1 1,249,009 and above 40,860,092 63.01
3,059 64,850,448 100.00
** Denotes 2% of the issued capital * Negligible SuBSTANTIAl SHAReHOlDeRS IN THe COMPANy as at 8 May 2009
No. of shares held
Direct % Deemed %
Sungei Ream Holdings Sdn Bhd (“SRHSB”) 40,860,092 63.00 – –
Buloh Akar Holdings Sdn Bhd (“BAHSB”) – – 40,860,0921 63.00
William John Huntsman 6,000 0.01 40,921,796 2 63.10
Elizabeth Mary Huntsman – – 40,860,0923 63.00
Richard George Huntsman – – 40,860,0924 63.00
Stephen William Huntsman 67,300 0.10 40,860,0925 63.00
DIReCTORS’ SHAReHOlDINGS IN THe COMPANy as at 8 May 2009
No. of shares held
Direct % Deemed %
Juliana Manohari Devadason 6,000 0.01 – –
Stephen William Huntsman 67,300 0.10 40,860,0925 63.00
Lim Hu Fang 6,000 0.01 – –
Jeraman @ Jayaraman a/l Narainan 10,000 0.01 – –
Tsen Keng Yam 1,000 ** – –
Roslan bin Hamir 1,000 ** – –
Notes:
1 Deemed interested by virtue of its substantial shareholdings in SRHSB. William John Huntsman and Stephen William Huntsman are deemed to be substantial shareholders of BAHSB by virtue of the shares held by Keniocowdy Nominees Sdn. Bhd. (“Keniocowdy”) as custodian trustees. Elizabeth Mary Huntsman and Richard George Huntsman are deemed to be substantial shareholders of BAHSB by virtue of the shares held by OSK Trustees Berhad (“OSK”) and Juliana Manohari Devadason (“JMD”) as custodian trustees. The shares held by the custodian trustees are in the following proportions:
“William’s Share” : 458,013 shares in BAHSB held by Keniocowdy for William John Huntsman, his children and grandchildren.
“Elizabeth’s Share” : 458,013 shares in BAHSB held by OSK and JMD for Elizabeth Mary Huntsman, her children and grandchildren
“Richard’s Share” : 457,914 shares in BAHSB held by OSK and JMD for Richard George Huntsman, his children and grandchildren.
2 Deemed interested by virtue of his interest in William’s Share and his substantial shareholdings in Thansmun Holdings Sdn Bhd.
a nalySIS of S HareHoldInGS
anaLysis of sharehoLdings (Continued)
Directors’ Shareholdings In Related Corporations as at 8 May 2009
The Directors’ shareholdings in related corporations are as disclosed in the Directors’ Report on page 38.
Thirty largest Registered Shareholders as at 8 May 2009
Name Shareholdings %
1 Sungei Ream Holdings Sendirian Berhad 40,860,092 63.01
2 HSBC Nominees (Asing) Sdn Bhd 1,249,008 1.93
3 Lim Seng Chee 899,500 1.39
4 Yeo Khee Bee 602,000 0.93
5 Lim Keow Gnoh 216,000 0.33
6 CIMSEC Nominees (Asing) Sdn Bhd 187,000 0.29
7 Citigroup Nominees (Asing) Sdn Bhd 177,600 0.27
8 Chong Yean Fong 170,000 0.26
9 Chow Soo Har @ Chow Yin Kong 169,000 0.26
10 JF Apex Nominees (Tempatan) Sdn Bhd 162,000 0.25
11 Parin d/o Laffa 153,000 0.24
12 Ang Jwee Lee 137,200 0.21
13 Chong Fa @ Chong Nam Yen 129,800 0.20
14 HSBC Nominees (Asing) Sdn Bhd 129,600 0.20
15 Chuah Lee Shyun 122,100 0.19
16 HDM Nominees (Asing) Sdn Bhd 120,200 0.19
17 Chong Meow Chong 120,000 0.19
18 Kwok Chee Yan 120,000 0.19
19 Mayban Securities Nominees (Asing) Sdn Bhd 120,000 0.19
20 HLG Nominee (Asing) Sdn Bhd 116,400 0.18
21 Sai Dezhao 115,000 0.18
22 Khaw Siang Hee 109,000 0.17
23 Malaysia Nominees (Tempatan) Sendirian Berhad 108,000 0.17
24 Public Nominees (Tempatan) Sdn Bhd 105,200 0.16
25 Chong Yean Kiong 102,900 0.16
26 Wong Loke Sing 101,000 0.16
27 Ho Sim Guan 100,000 0.15
28 Seah Mok Khoon 100,000 0.15
29 Yang Yen Fang 100,000 0.15
30 Rosa Woon Ah Moi 81,600 0.13
Total 46,983,200 72.45
JulIANA MANOHARI DevADASON
Chairman / Non-Independent Non-Executive Director
Malaysian, aged 59. She was appointed to the Board on 12 November 1987 and has been the Chairman of the Board since 1 January 2001. She is currently the Chairman of The Narborough Plantations, Public Limited Company, a company listed on the London Stock Exchange.
She holds a Bachelor of Arts (Honours) degree in Law and is a Barrister-at-Law. She was a Partner at Maxwell, Kenion, Cowdy & Jones from 1984 to 2003. She had been in practice as an advocate and solicitor for 28 years.
She is not related to any Director or major shareholder of the Company. She has not entered into any transaction which has a conflict of interest with the Company. She has no conviction for any offences within the past 10 years.
ADRIAN TSeN keNG yAM Executive Director
Malaysian, aged 59. He was appointed to the Board on 26 February 2007. He is also the Company Secretary at the Company. He is currently a Director of Talam Corporation Berhad, a company listed on the Main Board of the Bursa Malaysia Securities Berhad and also a Director in The Narborough Plantations, Public Limited Company, a company listed on the London Stock Exchange.
He is a Fellow of the Institute of Chartered Accountants (England and Wales) and a member of Malaysian Institute of Accountants and Malaysian Institute of Certified Public Accountants. In 1978, he joined Hanafiah Raslan & Mohamed as a consultant and was subsequently promoted to Senior Consultant in 1980. He was a principal of Hanafiah Raslan & Mohamed from 1984 to 1987 and was a partner of Arthur Andersen & Co. for more than 14 years from 1988 to 2003.
He is neither related to any Director or major shareholder of the Company nor has entered into any transaction which has a conflict of interest with the Company. He has no conviction for any offences within the past 10 years.
p rofIle of d IreCtorS
lIM Hu FANG
Independent Non-Executive Director
Malaysian, aged 59. She was appointed to the Board on 22 June 2002. She is the Chairman of the Audit Committee as well as the Remuneration and Nomination Commitee of the Board.
She is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Malaysian Institute of Accountants.
She is neither related to any Director or major shareholder of the Company nor has entered into any transaction which has a conflict of interest with the Company. She has no conviction for any offences within the past 10 years.
STePHeN WIllIAM HuNTSMAN Non-Independent Non-Executive Director
Malaysian, aged 51. He was appointed to the Board on 1 August 2001. He is a member of the Audit Committee. He is also a Director of The Narborough Plantations, Public Limited Company.
He has a Master in Business Administration from Henley Management College and Brunell University.
He is an Associate Member of the Chartered Institute of Secretaries. He joined the Company in 1997 as a Manager and was appointed General Manager of the Company in 2000 until his appointment to the Board of the Company. Prior to joining the Company, he was employed by The Automobile Association, UK as a Manager from 1986 to 1996. He was employed by Plessey PLC, UK as a Manager from 1980 to 1986.
He is the son to William John Huntsman, a substantial shareholder of the Company. He has not entered into any transaction which has a conflict of interest with the Company. He has no conviction for any offences within the past 10 years.
profiLe of direCtors (Continued)
JeRAMAN @ JAyARAMAN A/l NARAINAN Independent Non-Executive Director
Malaysian, aged 61. He was appointed to the Board on 1 January 2005. He is a member of the Audit Committee and Remuneration and Nomination Committee of the Board. He is also a Director of The Narborough Plantations, Public Limited Company.
He has a Master in Business Administration from The Kensington College and University and holds a Bachelor of Science (1st Class Honours) degree in Agriculture from Tamil Nadu Agricultural University in Coimbatore. He is also an Associate Member of The Incorporated Society of Planters. He was the Plantation Management Executive of National Land Finance Cooperative Society from 1972 to 1992. He joined Plantation Agency Sdn Bhd as Planting Adviser in 1993 and was appointed as Managing Director in 2001.
Presently, he is a panel member of the Industrial Court representing the employers (1 January 2007 to 31 December 2009), appointed by the Minister of Human Resources, Malaysia. He is also a Council Member at the Malaysia Agricultural Producers Association (MAPA) and Malaysian Oil Palm Association (MPOA).
He is neither related to any Director or major shareholder of the Company nor has entered into any transaction which has a conflict of interest with the Company. He has no conviction for any offences within the past 10 years.
ROSlAN BIN HAMIR
Independent Non-Executive Director
Malaysian, age 42. He was appointed to the Board on 25 July 2008. He is a member of the Audit Committee and the Remuneration and Nomination of the Board. He is currently the Managing Director of Kumpulan Fima Berhad and Fima Corporation Berhad, both of which are listed on the Main Board of the Bursa Securities Berhad. He is also a Director in the Narborough Plantations, Public Limited Company, a company listed on the London Stock Exchange.
He is an ACCA graduate with Bachelor of Arts (Honours) in Accounting and Finance and a member of the Malaysian Institute of Accountants. He was previously with Ernst & Young Consultants Sdn Bhd in Malaysia as an auditor as well as a management consultant from 1993 until 1998.
He is neither related to any Director or major shareholder of the Company nor has entered into any transaction which has a conflict of interest with the Company. He has no conviction for any offences within the past 10 years.
profiLe of direCtors (Continued)
C HaIrman ’ S S tatement
Dear Shareholders,
On behalf of the Board of Directors, it is my pleasure to present the Seventieth Annual Report and Audited Financial Statements of Riverview Rubber Estates, Berhad for the financial year ended 31 December 2008.
Financial Performance
The Company registered revenue of RM26.33 million for the current financial year, an increase of 25.78%
as compared to the preceding year. The Company also recorded a gross profit of RM18.64 million for the current financial year, an increase of 27.28% compared to the preceding year. The higher revenue is due to an increase in yield and an increase in the average selling price of fresh fruit bunch of oil palm (“FFB”).
The Company also recorded a pre-tax profit in the financial year to date of RM17.35 million against pre- tax profit of RM19.34 million in the preceding year. The lower pre-tax profit is mainly attributable to unrealised foreign exchange losses of RM4.12 million in the current year as compared to losses of RM0.62 million in the preceding year and also due to lower share of profits from associate of RM2.34 million as compared to a share of profit of RM2.96 million in the preceding year.
The overall performance has translated to decrease in earnings per share from 24 sen in 2007 to 19 sen in 2008.
Review of Operations
Year 2008 has been an eventful year for the Company and the world in general. The commodity industry has seen extreme volatility in commodity prices, adverse unpredictable weather conditions and mass speculation in the commodity exchanges which have driven the price of commodities such as Crude Palm Oil (CPO) to unprecedented highs. However, such high prices could not be sustained and the sharp decline was evident in the final six months of the financial year.
Despite the sharp decline in CPO price in the second half of 2008, our revenue was buffeted by the increase in our FFB yield, our FFB yield for 2008 of 25.56 tonnes per hectare increased by 13.6% from 22.50 tonnes per hectare in 2007.
In comparison, the national average FFB yield increased by 6% to 20.18 tonnes per hectare as against 19.03 tonnes per hectare achieved in 2007.
(Source : Malaysian Palm Oil Board)
Chairman’s statement (Continued)
Market Overview
The Malaysian palm oil industry recorded a satisfactory performance in 2008. Crude palm oil (CPO) production recovered sharply by 12.1%, while palm oil stocks remained high close to 2.0 million tonnes at the end of the year. Export earnings of oil palm products rose to record RM 65.2 billion. The local daily average traded CPO price declined by 66% within a span of eight months from a high of RM 4,179.00 in early March 2008 to a low of RM 1,403.00 in late November 2008
The year 2009 is expected to be a challenging one for the industry in view of the high prevailing palm oil stocks, set-back in prices and concerns of a global recession. The Malaysian Government has taken various measures to stabilize palm oil prices at remunerative levels. Among the measures are the Oil Palm Replanting Incentive Scheme to accelerate replanting and reduce CPO production in the near term, the implementation of the 5% biodiesel mandate in the transport and industrial sector starting with government vehicles in February 2009 and increasing exports under the CPO export duty free scheme. In view of the prevailing CPO prices, the average price in 2009 is expected to soften compared to last year.
(Sources : Malaysian Palm Oil Board)
Current year’s Prospects
While the average price for CPO in 2009 is expected to soften, we continue expect the performance of the Company to be satisfactory, as, barring any unforeseen circumstances our yields are expected to remain satisfactory.
Dividend
For the financial year ended 31 December 2008, the Company declared the following dividends.
Interim ordinary dividend of 5 sen per share and a special dividend of 3 sen per share on 64,850,448 ordinary shares, less income tax, paid on 18 July 2008.
Interim ordinary dividend of 5 sen per share and a special dividend of 7 sen per share on 64,850,448 ordinary shares, less income tax, paid on 16 January 2009.
Changes in Directorate and Company
On 25 July 2008, Mr. William John Huntsman retired from the board. He first joined in 1967 and was our Chairman from 1987 to 2000. He is largely credited for the prosperity and growth of the Company. His immense experience and contribution is duly acknowledged, furthermore, his knowledge of Malaysia, stretching back over very many years of life and experience is profound and it is pleasing to know that this will still be available to the other directors as he remains as our Senior Advisor.
I would like to take this opportunity to welcome En. Roslan bin Hamir who joined the Board on 25 July 2008, he has been a director of our associate, The Narborough Plantations, Berhad since 2002.
On 1 December 2008, the London Stock Exchange (“LSE”) announced that securities of the Company had been cancelled from admission to trading on the LSE. This was pursuant to the Company’s circular to its shareholders dated 31 October 2008 and the decision taken at its Extraordinary General Meeting held on 24 November 2008.
The Directors recommended the cancellation of the Company’s secondary listing on the official list of the United Kingdom Listing Authority and the LSE as the ordinary shares of the Company have been traded on the LSE since 1957 and in recent years, trading in the ordinary shares on the LSE has been negligible;
there has been only one such trade in the last four years and the total number of Ordinary Shares on the UK register represented less than 0.5% of the total number of Ordinary Shares in issue. Accordingly the Board has concluded that the costs of maintaining the secondary UK listing in these circumstances are no longer justified.
Although shareholder approval was not required, the Board has decided that the Cancellation should be conditional upon the approval of the shareholders’ of the Company at an Extraordinary General Meeting.
Appreciation
On behalf of the Board of Directors, I would like to record our appreciation particularly to Mr William John Huntsman, management and staff at all levels for their commitment, dedication and loyalty in the year under review. I also wish to record the sense of collective responsibility, professionalism and the wisdom of my fellow directors on the Board.
Finally, I would like to thank our valued shareholders, business associates, customers, friends and authorities for their continued trust, confidence, support and guidance.
JULiANA mANoHAri devAdAsoN Chairman
Chairman’s statement (Continued)
THe BOARD’S COMMITMeNT
The Board of Directors is committed to comply with the principles and best practices of the Malaysian Code of Corporate Governance (the “Code”) to ensure that high standards of corporate governance are practiced. The Board has put in place a framework for corporate governance which is appropriate for the Company to enable the Directors in discharging their responsibilities to protect and enhance shareholders’
value and the long term financial duties of the Company.
The composition of the Board is continuously reviewed to ensure that there is an effective mix of Executive as well as Independent and Non Independent Directors. The diverse professional expertise of Directors, spanning various fields including accounting, legal, business administration and agriculture, provide the Board with the requisite depth and quality in its deliberation and decision making.
THe BOARD
The Board has overall responsibility for the direction and control of the Company.
Composition and Responsibilities
The Board currently consist six (6) members, comprising five (5) Non-Executive Directors, including the Chairman, and one (1) Executive Director. Three (3) of the Directors on the Board are independent. A General Manager oversees field operations. There is clear segregation of responsibilities between the Chairman, who is a Non-Independent Non-Executive Director, and the Executive Director to ensure a balance of power and authority, such that no one individual has unfettered powers of decision.
The presence of three (3) Independent Non-Executive Directors facilitates the unbiased exercise of independent evaluation in Board deliberations and decision making, taking into account the interest of all stakeholders and also fulfill a central role in corporate accountability and serves to provide check and balance in the Board. The Independent Directors are individuals of credibility and have the necessary skill and experience to bring an independent judgment to bear on issues of strategy, performance, resources and standard of conduct. The Board has identified Madam Lim Hu Fang, as a Senior Independent Non- Executive Director to whom concerns may be conveyed. The profile of each Director is presented on pages 12 to 14 of the Annual Report.
The Board meets at least four (4) times a year and as and when required for specific matters to discuss the Company’s affairs and all important business decisions are formally discussed and documented. The Board has reserved certain specific matters for its collective review and decision. These include approval of annual and interim results, approval of annual budget, declaration of dividend and authorisation of major transactions. The Directors ensure that they have full and timely access to all relevant information to aid their decision making.
The Chairman of the Audit Committee and the Remuneration and Nomination Committee, Madam Lim Hu Fang, is the Senior Independent Non-Executive Director of the Company.
C orporate G overnanCe S tatement
Corporate governanCe statement (Continued)
During the financial year ended 31 December 2008, six (6) Board of Directors’ Meetings were held and the details of the meeting attendance of each Director are as follows:
Names of Directors
Number of meetings held
Number of meetings attended
Juliana Manohari Devadason 6 6
Stephen William Huntsman 6 6
Lim Hu Fang 6 6
Jeraman @ Jayaraman a/l Narainan 6 6
Tsen Keng Yam 6 6
Roslan bin Hamir# 6 3
# joined on 25 July 2008.
Re-election
At the Annual General Meeting each year, at least one Director shall retire from office. All Directors, shall retire from office at least once in every three years. Directors who are appointed during the year shall retire at the following Annual General Meeting immediately after their appointment. In any event, a Director, over seventy years old, retires annually.
Supply of Information
The Board has full and timely access to all relevant information to aid their decision-making. Each Director receives a notice of meeting, agenda and board papers containing information relevant to the business of the meeting prior to each Board Meeting. This issued in sufficient time to enable the Directors to obtain further information, if necessary.
The Board is regularly updated by the Company Secretary on the relevant statutory and regulatory requirements and has access to the advice and services of and independent professional advice at the Company’s expense, if necessary.
Directors’ Training
All Directors have attended the Mandatory Accreditation Programme (MAP) as prescribed by Bursa Malaysia Securities Berhad. The Directors are encouraged to attend Continuing Education Programme (CEP) and seminars to keep abreast with regulatory development and other development on the marketplace.
During the financial year, the audit committee made it mandatory for all Directors to attended a session on “Investor Relations” organised by Malaysian Investor Relations Association.
Board Committees
The Board decides on all major aspects of the activities of the Company and in common with other listed companies of similar size and organization, it decides upon most such matters as full Board.
The Board in discharging its duties is assisted by two Board committees, namely the Audit Committee and the Remuneration and Nomination Committee with written terms of reference which define their membership, authorities and responsibilities.
audit Committee
The Audit Committee, consisting of three (4) Non-Executive Directors who are Madam Lim Hu Fang (Chairman), Mr. Stephen William Huntsman, Mr. Jeraman @ Jayaraman a/l Narainan, and En. Roslan bin Hamir majority of whom are independent, meets at least four times a year. The Committee is responsible for reviewing a wide range of financial matters before their submission to the Board and monitoring the controls that are in place to ensure the integrity of the financial information reported to the shareholders.
The Audit Committee also reviews annually the terms of appointment of the auditors to ensure that an objective, professional and cost-effective relationship is maintained.
The terms of reference and responsibilities of this Committee are more particularly set out in the Audit Committee Report on pages 23 to 25 of the Annual Report.
remuneration and nomination Committee
The Remuneration and Nomination Committee is currently made up of three (3) Independent Non- Executive Directors.
The Committee keeps under review the composition of the Board, a profile of the required skills, attributes and experience and makes recommendations to the Board concerning new appointments and re-appointment of all directors.
In respect of remuneration, the function of the Committee is to determine the remuneration packages of the Executive Director and Senior Management. The Executive Director plays no part in deciding his own remuneration. In addition, the Committee makes recommendations to the Board regarding the annual fee for the Directors for each financial year. Directors’ fees are tabled to the shareholders for approval at the Annual General Meeting prior to payment to the Directors.
The Committee has met once for the financial year under review.
DIReCTORS’ ReMuNeRATION
The Remuneration and Nomination Committee (“the Committee”) comprises entirely of Independent Non- Executive Directors, namely Madam Lim Hu Fang (Chairman), Mr. Jeraman @ Jayaraman a/l Narainan and En. Roslan bin Hamir. The Committee operates within agreed terms of reference and in respect of Directors’ remuneration, is responsible for making recommendations to the Board on the performance related packages for the General Manager and senior management as well as Directors.
Corporate governanCe statement (Continued)
In its consideration of remuneration matters for the financial period under review, the Committee takes into account the compensation practices of other companies of comparable sizes, market sectors and business complexity and the performance of individual Directors. In ensuring continuing improvement in the performance of the Company, the overall remuneration policy is aimed at attracting, retaining and motivating high calibre management. Consistent with this policy, the component parts of the remuneration package are designed to link rewards to individual and corporate performance in the case of General Manager. For Directors, the fee levels are intended to commensurate with the experience and level of responsibilities of the concerned.
The details of the remuneration of each Director of the Company during the financial year are as follows:
Basic
salary/fee Bonus Other
benefits Total
2008 Total
2007
RM RM RM RM RM
executive
Tsen Keng Yam 50,000 – – 50,000 50,000
Non-executive
Juliana Manohari Devadason 50,000 – – 50,000 50,000
Lim Hu Fang 50,000 – – 50,000 50,000
Stephen William Huntsman 50,000 – – 50,000 124,383
Jeraman @ Jayaraman a/l Narainan 50,000 – – 50,000 50,000
Roslan bin Hamir # 20,833 – – 20,833 –
William John Huntsman # # 29,200 – – 29,200 50,000
250,033 – – 250,033 324,383
Grand Total 300,033 – – 300,033 374,383
# joined on 25 July 2008.
## retired on 25 July 2008.
RelATIONSHIP WITH SHAReHOlDeRS AND INveSTORS
The Board maintains a policy of keeping its shareholders and investors, irrespective of size, informed about the Company’s activities and progresses as the Directors value a constructive relationship with its shareholders and investors. Communication with shareholders and investors through timely announcements to Bursa Malaysia Securities Berhad are given high priority. In addition, quarterly report announcements, the financial statements and other required announcements are available at Bursa Malaysia’s website.
The principal forum for dialogue with shareholders remains at the Annual General Meeting (“AGM”).
Notice of the Annual General Meeting and the Annual Report are sent to shareholders at least 21 days before the date of the meeting.
Corporate governanCe statement (Continued)
The presence of Board members, representatives of the external auditors at each AGM demonstrates a high level of accountability and transparency as it enables an available response to queries regarding business operations and financial statements of the Company. Other than queries to the Chairman, stakeholders may convey their questions or concerns to Madam Lim Hu Fang, the Senior Independent Non-Executive Director of the Company.
ACCOuNTABIlITy AND AuDIT Financial Reporting
The Company’s financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and accounting standards adopted by the Malaysian Accounting Standards Board.
The Board is responsible to ensure that the accounting policies are consistently applied and the financial statements of the Company present a balanced and understandable assessment of the state of affairs of the Company. In addition, the Board is also assisted by the Audit Committee to oversee the Company’s financial reporting process and the quality of its financial reporting.
A Statement of the Directors pursuant to Section 169 of the Companies Act, 1965 is set out on page 41 of the Annual Report.
A Statement of the Directors’ responsibility in relation to the financial statements is set out on page 28 of the Annual Report.
Internal Control
A Statement on Internal Control of the Company is set out on pages 26 to 27 to the Annual Report.
Relationship with Auditors
The Company has established a transparent, active and formal relationship with the auditors, both external and internal, through the Audit Committee. The role of the Audit Committee in relation to the auditors is set out in the Audit Committee report on pages 23 to 25 of the Annual Report.
Non-audit Fees
The amount of non-audit fees (excluding service tax and expenses) paid to the external auditors by the Company during the financial year under review amounted to RM5,000.00.
Corporate governanCe statement (Continued)
The Board of Directors is pleased to present the Audit Committee Report for the financial year ended 31 December 2008.
Membership
The members of the Audit Committee as at the date of this report are as follows:
Lim Hu Fang (Chairman)
(Independent non-executive director) Jeraman @ Jayaraman a/l Narainan (Independent non-executive director) Stephen William Huntsman
(Non-independent non-executive director) Roslan bin Hamir
(Independent non-executive director) Meetings
During the financial year ended 31 December 2008, four (4) Audit Committee meetings were held and the details of the meeting attendance by each member are as follows:
Name of members
Number of meetings held
Number of meetings attended
Lim Hu Fang 6 6
Stephen William Huntsman 6 6
Jeraman @ Jayaraman a/l Narainan 6 6
Roslan bin Hamir # 6 3
# joined on 25 July 2008.
Composition
The Audit Committee comprises at least three (3) non-executive director (who are not alternate directors), a majority of whom shall be independent directors. At least one member of the Audit Committee shall be member of the Malaysian Institute of Accountants. The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an independent director.
vacancy, Retirement and Resignation
All members, including the Chairman, hold office only as long as they serve as directors of the Company. If for any reason the membership of the Audit Committee fails to comply with the membership requirements, the Board shall within three (3) months of the event, appoint such number of new member as may be required to fill the vacancy.
Powers and Authority
In carrying out its functions, the Audit Committee will in principle have full, free and unrestricted access to all the Company’s records, properties and personnel.
a udIt C ommIttee r eport
audit Committee report (Continued)
Purposes of the Audit Committee The Audit Committee shall:
a) Provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the corporate accounting and reporting practices of the Company.
b) Maintain, through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as internal auditors.
c) Act upon the Board’s request to investigate and report on any issue or concerns in regard to management of the Company.
d) Obtain independent professional or other advice, wherever necessary and reasonable for performance of its duties.
e) Convene meetings with the internal and external auditors, excluding the attendance of the executive members of the Committee, whenever deemed necessary.
f) Prepare an Audit Committee Report for the consideration of the Board at the end of each financial year for inclusion in the Annual Report of the Company.
g) Report to the Bursa Malaysia when it is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Bursa Malaysia Listing Requirements.
Functions of the Audit Committee
The Audit Committee shall review, appraise and report to the Board on:
a) The quality and effectiveness of the entire accounting, financial reporting and internal control system within the Company.
b) The scope of the internal and external auditors’ audit plan, their evaluation of the system of internal control and the audit reports of the financial statements.
c) The propriety of accounting policies and practices adopted by Management and accepted by the external auditors, where alternatives are also acceptable.
d) The adequacy of the disclosure of information essential to a fair and full presentation of the financial affairs of the Company.
e) Any significant difficulties encountered or material discoveries made by the external auditors or internal auditors.
f) The effects of any changes in accounting principles or any developments emanating from the accounting profession or any statutory authority.
g) The adequacy of the scope, functions and resources of the internal audit functions, if any and that it has the necessary authority to carry out its work.
h) The internal audit programme, processes, the results of the internal audit programme, process or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function.
i) The quarterly results and year end financial statements prior to the approval by the Board, focusing particularly on:
• Changes in or implementation of major accounting policy changes;
• Significant and unusual events; and
• Compliance with accounting standards and other legal requirements.
j) Any related party transaction and conflict of interest situation that may arise within the Company including any transaction, procedure or course of conduct that raises questions of management integrity.
k) The nomination, appointment and re-appointment of external auditors and their remuneration, and any questions of their resignation or dismissal.
Summary of activities of the Audit Committee
A summary of activities of the Audit Committee during the year under review are as follows:
1. Reviewed the quarterly unaudited financial results and recommend to the Board for approval prior to release to the Bursa Malaysia;
2. Reviewed the scope of work and audit plan of the internal and external auditors;
3. Reviewed the audited financial statement and the Annual Report;
4. Review of the field reports on the business operations;
5. Review the internal audit report, which highlighted the audit issues and findings, recommendations and Management’s responses thereto;
6. Conducted informal high-level risk assessment; and
7. Prepared the Audit Committee report for inclusion in the Annual Report.
Internal Audit Function
The Internal Auditors support the Audit Committee in discharging its duties. The Internal Auditors’ role in conducting systematic reviews on the system of internal control and the effectiveness of the processes that are in place to identify, manage and report risk, in doing so the Internal Auditors are able to independently and objectively evaluate and report on the adequacy, integrity and effectiveness of the Company’s overall system of internal control. Results of such reviews are reported to the Audit Committee.
The scope of work of the Internal Auditors is planned according to an assessment of the key processes and executed with the prior approval of the Audit Committee. In addition, the Internal Auditors may also conduct ad hoc reviews at the request of the Management with approval from the Audit Committee.
In conducting their independent audit, the Internal Auditors placed emphasis on a risk-based auditing approach. The audit findings and recommendations, which also highlight areas of non compliance with the Companies policies, procedures, guideline and Rule Book, were communicated to the Audit Committee to enable a timely evaluation of the adequacy and integrity of the Company’s internal control system.
audit Committee report (Continued)
S tatement o n I nternal C ontrol
In compliance with Section 9 of the Capital Markets and Services Act 2007, the Board of Directors is pleased to present the Statement on Internal Control with regard to the financial year under review.
INTRODuCTION
The Board acknowledges its overall responsibility for the Company’s system of internal control and for reviewing its effectiveness in safeguarding shareholders’ investment and the Company’s assets from inappropriate use or from loss and fraud, and ensuring that liabilities are identified and managed. However, such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.
RISk MANAGeMeNT
The directors are responsible for identification and evaluation of key risks applicable to the business. These risks are assessed on a continual basis as they may be associated with a variety of internal or external factors. These issues are regularly reviewed and discussed in order to form a basis for determining how risks should be managed.
RevIeW OF THe SySTeM OF INTeRNAl CONTROl
The Executive Director is delegated with the responsibility to monitor and review strategies, operational, financial and internal control matters, In this respect, the Executive Director is supported by the General Manager. Significant issues are brought to the Board’s attention regularly during Board meetings.
The key elements of the procedures include the following:
Organisation
The Company has a defined organizational structure with clear lines of responsibility and specific delegation of authority for planning, executing, controlling and monitoring business operations in order to achieve Company’s objectives.
Information and Communication
The Board undertakes periodical strategic reviews, including the consideration of long term objectives and evaluation of business alternatives. Management prepares annual budget and monthly management accounts for submission to the Board for approval. The directors meet regularly to undertake reviews to evaluate the performance of the operations and gauge against approved budgets.
Through these mechanisms, the Company’s performance is continually monitored, risks identified in a timely manner, their financial implications assessed and corrective actions agreed and implemented.
statement on internaL ControL (Continued)
Control Procedures
The Company has adequate control procedures designed to ensure complete and accurate accounting for transactions and to limit the potential exposure to loss of assets or fraud. Measures taken include physical controls, segregation of duties, reviews by the directors and management, internal auditors and external audit to the extent necessary to arrive at their audit opinion
Monitoring and Corrective Action
The Board regularly reviews the overall operations of the Company. The Audit Committee is tasked to review the assurance procedures to obtain the level of assurance required and reports to the Board.
Internal Audit Function
The Internal Auditors’ supports the Audit Committee in discharging its duties. The Internal Auditors’ role conducts systematic reviews on the system of internal control and the effectiveness of the processes that are in place to identify, manage and report errors and irregularities, in doing so the Internal Auditors are able to independently and objectively evaluate and report on the adequacy, integrity and effectiveness of the Company’s overall system of internal control. Results of such reviews are reported to the Audit Committee.
The scope of work of the Internal Auditors is planned according to an assessment of the key processes and executed with the approval of the Audit Committee. In addition, the Internal Auditors may also conduct ad hoc reviews at the request of the Management with approval from the Audit Committee. In conducting their independent audit, the Internal Auditors placed emphasis on a risk-based auditing approach. The audit findings and recommendations, which also highlight areas of non compliance with the Companies policies, procedures, guideline and Rule Book, were communicated to the Audit Committee to enable a timely evaluation of the adequacy and integrity of the Company’s internal control system.
In addition, several informal procedures undertaken by the Audit Committee include, regular field and office inspections by a member of the Audit Committee and the written reports are submitted to the Board on the effectiveness and control procedures of estate operations. The Audit Committee and the Board also review the plantation visit reports submitted by the independent Visiting Agent twice a year.
The external auditors have reviewed this Statement pursuant to paragraph 15.24 of the Bursa Malaysia Listing Requirements and have reported that it appropriately reflects the processes that the Board has adopted in reviewing the adequacy and integrity of the system of internal control.
Weaknesses in internal controls that resulted in material losses
There were no material losses incurred during the financial year ended 31 December 2008 as a result of weaknesses in internal control. Nonetheless, Management continues to take measures to strengthen the control environment.
The Directors are required to prepare financial statements which give a true and fair view of the state of affairs of the Company as at the end of each financial year and of its results and its cash flows for that year then ended.
The Directors consider that in preparing the financial statements:
• the Company has used appropriate accounting policies and are consistently applied;
• reasonable and prudent judgements and estimates were made; and
• all applicable approved accounting standards in Malaysia have been followed.
The Directors are responsible for ensuring that the Company maintains accounting records that disclose with reasonable accuracy the financial position of the Company, and which enable them to ensure that the financial statements comply with the Companies Act 1965.
The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Company, and to prevent and detect fraud and other irregularities.
This statement is prepared as required by the Bursa Malaysia Listing Requirements.
S tatement o f d IreCtorS ’ r eSponSIbIlIty
in reLation to the finanCiaL statements
Corporate Social Responsibility (CSR) is not new to the Company, being involved in the oil palm industry with a presence of over 70 years, we recognize our obligation to our stakeholders. This encompasses our commitment to deliver profits to enhance shareholder value and at the same time, make a positive contribution to our employees, stakeholders and to society in general.
In the recent years, claims indicating oil palm cultivation as the main cause towards deforestation in Malaysia have often made headlines globally. We wish to categorically state that we welcome environmental consciousness and view it as absolutely essential. Nevertheless, it has to be said that the most robust kind of development can only be carried out through the interchange of facts and not through altercation laced with emotions, which regretfully, has often been the case with such claims. In this regard, it is important to acknowledge that the pace of oil palm cultivation and expansion is disproportionate to deforestation caused by illegal logging.
We fully support the initiatives undertaken to ensure sustainable oil palm cultivation and the production of palm oil. We have a heritage of maintaining a high degree of commitment that is directed towards social well-being and compassion towards our employees. Today such practices are known as CSR.
In assuming CSR, we recognise the benefits that have accrued to the business including the strengthening of our reputation, as well as enhancing employee motivation, which in turn contributes to the long term well-being of the Company. Our CSR involvement primarily focuses with the direct community with which the Company operates. Past, present and ongoing CSR initiatives and include the following:
WORkPlACe Safety
To ensure a safe, productive and efficient work environment, our estates had previously launched a pictorial safety and awareness campaign to educate and train our workforce to operate with OSHA requirements.
During the year, the Company completed the retrofitting of all FFB ramps using the chain block door system.
Housing
A high degree of dedication and devotion continues to be directed at toward the social well-being of our employees, initiatives to this end include housing amenities, places of worship for our employees, child care services, transportation subsidies, utilities subsidies and subsidies for furniture and fittings.
Medical
On one of our estates, we have a trained resident Hospital Assistant who assists in medical treatment.
Private and public medical support are made available to our employees during the year the Company appointed an OSHA specialist to our panel of doctors.
C orporate S oCIal r eSponSIbIlIty S tatement
FFB ramps using chain block door system
COMMuNITy
land for Workers House Ownership Scheme
Riverview and the National Union of Plantation Workers entered into discussions which in 2004 resulted in an agreement to provide amenities for the workers of Riverview’s Buloh Akar 1 Estate by helping them own homes through the provision of land via a Workers House Ownership Scheme. The designated site was a portion of Riverview’s estates situated along the Parit-Bruas Road at the town of Simpang Tiga. This site was chosen primarily due to its accessibility to pubic transport, electricity and water.
Riverview assigned approximately 3 hectares of its land which was ultimately sub-divided to 41 titles. Between 2006 and 2008, with the assistance of Riverview and no cost to the workers, the titles were transferred to the workers and/or their family members. Legal fees, fees related to the sub-division and transfer and fees relating to the preparation and submission of the layout plan and planning report were borne by Riverview.
Our Director, Mr. Stephen W. Huntsman was actively involved with this process and was directly involved in the negotiations and discussions with the Workers House Ownership Scheme Committee.
Contribution: Rebuilding a New House
In late 2008, The Star carried an article of two mentally handicapped brothers aged 72 and 63. These brothers no longer have any surviving relatives to care for them and have been living in a dilapidated shack for more than 20 years.
With the help of locals, there have been efforts to raise funds to rebuild the house. Riverview and its associates have donated half of the required amount. We are pleased to note that in early 2009, The Star carried an article indicating the completion of the house.
laSallian education Programme
The LaSallian Expedition and Development (“LEAD”) programme is organised by the La Salle Centre, the La Salle Centre is a project of the De La Salle Brothers in Malaysia focusing on the development and leadership training, with particular attention paid to disadvantaged youths.
The LEAD programme is for students from financially disadvantaged or large families, and is an outdoor adventure camp meant as a character and confidence building programme for its participants. Currently sutdents are only selected from La salle Schools, we have been informed that this programme will be extended to include non La Salle Schools.
Corporate soCiaL responsiBiLity statement (Continued)
Workers quarters at the Chenderong Division
Riverview has provided financial assistance to the La Salle Centre to carry out this programme and intends to continue providing such support as Riverview believes in investing in the future of the country via its children.
Persatuan Wanita Perak untuk Wanita (“PWW”)
The PWW is a registered NGO set up in 2003 to enhance the status and lives of women in Perak. Riverview recognises the need to raise awareness concerning violence, and to provided assistance and support for women and children.
To that effort, Riverview and its associates provided financial assistance to the PWW to support its efforts to set up a training and relief centre in Ipoh, which will be used to carry out its activities in advocating mutual respect and gender equality.
Distribution of Rice and Cooking Oil
This is a programme by Riverview to distribute rice and cooking oil to the needy. To date, witht he assistance of the local authorities among other, Riverview has identified 18 such families, to whom rice and cooking oil have been distributed. The distribution are carried out monthly by employees of the Riverview; timely assessments will also be carried out to ensure that only the needy receive such assistance.
Riverview intends to expand this programme to include more such families as well as the mode of assistance provided; future plans include the reimbursement of cost to send children to school as well as to determine the adequacy of the existing assistance provided. School-going children from such families were also provided shoes and school uniforms.
The Board of Riverview strongly believes in giving back to society and continues to be vigilant in identifying areas where it can contribute
eNvIRONMeNT land Clearing
We have a zero tolerance policy towards open burning as this not only ensures that air pollution is mimimised but also results in numerous advantages as well. The vestige debris comprising brushes are left to biodegrade, thus releasing nutrients and adding valuable organic matter to the soil. This reduces the use of inorganic fertlisers and also lowers carbon dioxide emission.
Soil Fertility
To maintain soil fertility and reduce erosion, best practices through bio-engineering means via vegetation and plant succession on hilly terrain is used and encouraged at all our estates. Frond placement, cover crop, use of empty fruit bunch (EFB) mulching is used to enable organic matter intensity to build up.
Corporate soCiaL responsiBiLity statement (Continued)
Pest Management
We have a history of utilising biological control to combat pests and rodents instead of chemical control.
The use of barn owls and tunera plants to combat rodents and bag worms infestation is a prime example.
Such understanding enables us to ensure that the environmental hazards of chemical-based pesticides are kept to a minimum and only used as a last resort.
Corporate soCiaL responsiBiLity statement (Continued)
Fertiliser use
We have a policy of maximising organic manuring and to reduce dependence on inorganic and chemical-based fertilisers. This is conducted through a programme of nutrient recycling and the utilisation of oil palm and palm oil by-products such as EFB and decanter cakes which are recycled through the fields for mulching.
efficient Water use
This includes the setting-up of an effective and sufficient system to use and harvest rainwater such as strategically placed silt pits throughout the estates to enable water retention.
Tunera plants
Barn for owls
p ropertIeS of tHe C ompany
location Description Area Tenure
Date of Revaluation
Approximate Age of Buildings
Net Book value at 31 December
2008*
RM Buloh Akar
Estate, Parit, Perak
Rubber/oil palm estate land used as plantation
1,041.78 hectares
Freehold November 2007
– 42,784,000
Hibernia Estate, Selama, Perak
Oil palm estate land used as plantation
372.67 hectares
Freehold November 2007
– 16,500,000
Riverview Estate, Tanjung Tualang, Perak
Rubber/oil palm estate used land as plantation
376.97 hectares
Freehold November 2007
– 16,665,000
Office building
– Freehold – 436,656
Oil palm estate land used as plantation
9.41 hectares
Leasehold – expiring 20.11.2012
– – 70,000
3 Leboh Perusahaan Klebang 9, Chemor, Perak
Factory land and building for rental
8,400 sq.
metres
Leasehold – expiring 17.10.2089
– 12 years 3,260,906
79,716,562
* Amount includes value of biological assets
THIS PAgE HAS BEEN INTENTIONALLy LEFT BLANk.
2008 AnnuAl RepoRt
70
thAnnuAl GeneRAl MeetinG
R iveRview R ubbeR e states , b eRhad
Company No. 820-v — Incorporated In Malaysia
page
36 - 40 Directors’ Report
41 Statement By Directors
41 Statutory Declaration
42-43 Independent Auditors’ Report
44 Income Statements
45 - 46 Balance Sheets
47 - 49 Statements Of Changes In equity
50 - 51 Cash Flow Statements
52 - 89 Notes To The Financial Statementss
DireCtors’ report &
AuDiteD FinAnCiAl stAtements
d IreCtorS ’ r eport
The directors have pleasure in presenting their report together with the audited financial statements of the Economic Entity and of the Company for the financial year ended 31 December 2008.
PRINCIPAl ACTIvITy
The principal activity of the Company during the financial year is the cultivation of oil palm. There has been no significant change in the nature of the principal activity during the financial year.
ReSulTS
economic
entity Company
RM RM
Profit for the year 12,025,650 10,372,589
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.
In the opinion of the directors, the results of the operations of the Economic Entity and of the Company during the year have not been substantially affected by any item, transaction or event of a material and unusual nature.
DIvIDeNDS
The amount of dividends paid or declared by the Company since 31 December 2007 are as follows:
RM In respect of the financial year ended 31 December 2007:
Interim ordinary dividend of 5 sen per share and a special dividend of 7 sen per share on
64,850,448 ordinary shares, less income tax, paid on 20 February 2008 5,680,899 In respect of the financial year ended 31 December 2008:
First interim ordinary dividend of 5 sen per share and a special dividend of 3 sen per
share on 64,850,448 ordinary shares, less income tax, paid on 18 July 2008 3,839,147 Second interim ordinary dividend of 5 sen per share and a special dividend of 7 sen per
share on 64,850,448 ordinary shares, less income tax, paid on 16 January 2009 5,758,720 The directors do not recommend the payment of any final dividend in respect of the current financial
direCtors’ report (Continued)
DIReCTORS
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
Juliana Manohari Devadason Lim Hu Fang
Stephen William Huntsman
Jeraman @ Jayaraman A/L Narainan Tsen Keng Yam
Roslan bin Hamir - appointed on 25.07.2008 William John Huntsman - retired on 25.07.2008
DIReCTORS’ BeNeFITS
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 6 to the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
DIReCTORS’ INTeReSTS
According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:
Number of ordinary shares of RM1 each
At At
1.1.2008 Bought Sold 31.12.2008 The Company
Direct interest
Juliana Manohari Devadason 6,000 – – 6,000
Stephen William Huntsman 67,300 – – 67,300
Lim Hu Fang 6,000 – – 6,000
Jeraman @ Jayaraman A/L Narainan 1,000 9,000 – 10,000
Tsen Keng Yam 1,000 – – 1,000
Roslan bin Hamir 1,000 – – 1,000
Indirect interest
Stephen William Huntsman 40,842,892 – – 40,842,892
Sungei Ream Holdings Sdn Bhd (Immediate holding company)
Indirect interest
Stephen William Huntsman 11,739,022 – – 11,739,022
Buloh Akar Holdings Sdn Bhd (ultimate holding company) Indirect interest
Stephen William Huntsman 1,373,940 – – 1,373,940
direCtors’ report (Continued)
OTHeR STATuTORy INFORMATION
(a) Before the income statements and balance sheets of the Economic Entity and of the Company were made out, the directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that there were no known bad debts and that no allowance for doubtful debts was necessary; and
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) it necessary to write off any bad debts or to make any allowance for doubtful debts in respect of the financial statements of the Economic Entity and of the Company; and (ii) the values attributed to the current assets in the financial statements of the Economic Entity
and of the Company misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Economic Entity and of the Company misleading or inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Economic Entity and of the Company which would render any amount stated in the financial statements misleading.
(e) As at the date of this report, there does not exist:
(i) any charge on the assets of the Economic Entity or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or
(ii) any contingent liability in respect of the Economic Entity or of the Company which has arisen since the end of the financial year.
(f) In the opinion of the directors:
(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Economic Entity or of the Company to meet their obligations when they fall due;
(ii) and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Economic Entity or of the Company for the financial year in which this report is made.
